Although 84 per cent of Canadians aged 18 to 26 don't currently own a home, more than one-third of them plan to purchase one within the next two years. Of the remainder, 85 per cent say they'll buy a house within the next 10 years, according to a survey by research company Ipsos-Reid for Century 21 Canada.

"Generation Y (the 18 to 26 year olds) represents the next big wave of potential home buyers, so it's important to know what their attitudes are toward home ownership," says Don Lawby, president of Century 21 Canada. "The fact that they seem to have such a positive outlook means we can expect residential real estate to continue providing impetus to the national economy for many years to come."

The survey included 601 people, of which half were "Generation Y" and the other half were 40 to 54, for comparative purposes. It found that young Canadians have similar attitudes to their parents' generation when it comes to home buying. One difference is that more of the younger group who already own a home (17 per cent), purchased it for investment reasons. Only three per cent of the baby boomers interviewed had purchased a house primarily as an investment. The survey found that location is more important than price when young Canadians are shopping for a home.

Most of those surveyed say the reason they would buy a home is because they are fed up with paying rent. "In many regions, first-time home buyers are a significant driver of sales," says Lawby. "With interest rates at historic lows, more and more young people are realizing that it's less expensive to buy and repay a mortgage loan than it is to rent."

He says, "It simply doesn't make sense to people to rent if they can raise the deposit to buy a home of their own."

While the survey indicates a bright future for real estate, another report issued this week says that despite low interest rates, 10 years of economic expansion, and rising rental vacancy rates, one in five Canadian households still cannot afford acceptable shelter. The report, by TD Economics, says that's "a strikingly high number", and that "the lack of affordable housing is a problem confronting communities right across the nation -- from large urban centres to smaller, less-populated areas."

Most of the problems are in the rental markets, the report says. It says housing is not affordable when more than 30 per cent of pre-tax income is spent for shelter. Those most in need are individuals who live alone, particularly elderly females, and single-parent families headed by women.

Although many renters have purchased homes and created vacancies in the rental market, most of this is occurring at the high end of the market. There's an acute need for low-income rental accommodation across the country.

The TD report says the "ultimate solution to the affordable housing problem is to raise market incomes and develop a more effective and equitable income transfer regime to help lower-income households avoid the perils of the proverbial low-income trap." But in the meantime, it says, governments must improve support for lower-income individuals, and address the current supply shortage of rental housing.

The report suggests that rather than putting an emphasis on producing new rental stock, it's more economical to target public resources on preserving and rehabilitating existing stock.

It also says there are a number of "market imperfections" that impede the creation of affordable housing. "These include everything from higher municipal property taxes on multi-unit residential dwellings than on single-detached, to rent controls, to a lack of available land in reasonable-cost locations."

The entire TD Economics report, Affordable Housing in Canada: In Search of a New Paradigm, is available online at www.td.com/economics.

Meanwhile, the Canadian Real Estate Association reports that the average sale price for May set an all-time record at $220,525, an increase of 7.3 per cent from a year ago.